Government quick to torpedo CRTC

It appears that Canada’s most contentious regulatory authority, the CRTC, has made yet another, ill advised ruling seen to be too favourable to Canada’s largest telecommunications companies – and once again the federal government has reacted to public outrage by promptly quashing the decision.

It appears that Canada’s most contentious regulatory authority, the CRTC, has made yet another, ill advised ruling seen to be too favourable to Canada’s largest telecommunications companies – and once again the federal government has reacted to public outrage by promptly quashing the decision.

My take is that the government’s move to force overturning the ruling, which could have eventually led to progressive (sneakily introduced) increased costs for all or most internet users and a great deal more consumer anger, is designed to reflect that government is listening to what some people have to say about erratic decisions by groups like the CRTC.

Who says there’s no election on the way?

Prime minister Harper and Industry minister Tony Clement’s rapid government involvement in an extremely rancorous “mostly in-the-media” debate that was going on over how and how much Canadians should pay for internet services and how much flexibility there is for developing competition in this area which is increasingly part of virtually every Canadian family’s lives, seemed to be pretty instinctive.

However, it did quickly follow an on-line petition move that swept across the country like “Justin Beiber flu” as many as 375,000 casual or more intense internet users protested the ruling – seen as a potentially serious “rip off” designed to line the pockets of major internet service providers (ISPs) like Bell, Shaw and Rogers.

Put simply, the CRTC has already acceded to a move by major ISPs to limit bandwidth access to users downloading from internet and to charge fees for more frequent consumers who exceed monthly limits.

The new ruling was seen to result in a reduced level of choice and competition for service from smaller ISPs and giving perceived unfair and innovation-stifling advantages to the larger and better known providers … and amounted to putting a usage meter on your internet use.

Minister Clement was seen to be moving carefully on this one – because of his government’s already-stated stance on reducing red-tape regulation, encouraging competition, job creation and protecting consumers from undue manipulation. But floods of e-mails, tweets and other on-line complaints initiated a faster response than most expected.

Still, the point is that large ISPs move to usage-based billing, or metered internet service, has been receiving a raucous and jaundiced reaction from internet users, many of whom feel they were already being gouged by Canadian suppliers -particularly when directly comparing with service charges assessed by major suppliers in the United States and in various other countries. Mumbo-jumbo about bandwidth availability helped to cloak the large ISPs intentions in mythy mist.

Internet costs for Canadian consumers are undoubtedly higher than those in the US and many other countries for lesser service, so the prospect of opening a door for even higher costs quickly created a lot of noise for the CRTC and the government.

Perhaps the most contentious issue, however, is the high profit potential of the usage-based billing compared to the costs of providing that service.

Many critics also allege that the majors were encouraging the move as a means to limit competition by new-to-Canada services such as Netflix, which is introducing streamed movies to Canada – and have announced costs of $8 a month for unlimited service, while Rogers, Shaw and Bell are all still charging about $6-7 for a single movie, though their pay-per-view.

Was government intervention popular? A CBC poll showed 93 per cent of respondents supported the move. What else can I say?

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